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Articles Posted in Tax Law

By Nathan Vinson, Partner

English, Lucas, Priest and Owsley, LLP

If you aren’t paying Kentucky sales tax on items you buy online, you will be soon – and you have the great state of South Dakota to thank for it.

By Nathan Vinson, Partner

English, Lucas, Priest and Owsley LLP

Tax law changes in 2018 were huge at both the state and national level. For this blog post, we’re parsing through the changes to the law that require sales tax to be collected on some services and “luxuries,” which was not required in the past.

By Nathan Vinson, Attorney and Partner
English, Lucas, Priest and Owsley, LLP

estate planWe’ve had lots and lots of questions about the new tax law passed by Congress and signed into law by President Donald Trump in late 2017. It is a large, complicated and sweeping bill that the average person may have some trouble deciphering, which is understandable. We wanted to tackle here what we see as one of the major benefits for those planning their estates: doubling the exemption for estate taxes.

If you’re looking to a solid guide to all of the tax law changes, read The Motley Fool’s take on it here.

In 2011, this base was set at $5 million, and it was indexed for inflation, meaning that you could leave up to $5 million (plus the adjustment for inflation) to your heirs and your estate would pay no estate tax. For tax year 2017, that amount was $5.49 million once adjusted for inflation.

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tax booksEach year, the Treasury Department examines the cost of living in the U.S. and adjusts limitations for retirement plans and many other similar items that affect taxpayers throughout the U.S. As has happened previously, the Treasury raised the limits for contributions to pensions and other retirement plans such as 401(k)s, 403(b)s and most 457 plans.  All of this helps today’s workers save for retirement with pre-tax dollars, which is a tremendous benefit.

Our tax code requires the Secretary of the Treasury to make this adjustment.

The biggest news is that the contribution limit to employer-sponsored retirement plans, such as the above-mentioned 401(k)s, etc., has gone from $18,000 for calendar 2017 to $18,500 for calendar 2018. If you were bumping up against this limit in 2017, you can now adjust and put in just a little bit more, which is always good news.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

Improvements to tax law and reducing taxes are a very popular item on most politicians’ platforms. You won’t find anyone who openly says people should pay more. At least, not anyone currently serving in office.

They’re right, by the way – our tax code is far too cumbersome and it changes constantly. (And no, I’m not running for office.)

President Trump has indicated he wants to reform the tax code and change the way people pay taxes. Lawmakers are reportedly discussing how to do that while paying for expensive new initiatives. How can you do it all?

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

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Photograph 047 by Lauren Mancke found on minimography.com

Each year, the IRS sets dollar amounts for specific types of exemptions. Usually, these don’t change much – $100 here, $50 here, etc. You’ll need these numbers as you do your taxes this year.

The personal exemption amount for 2016 taxes is $6,300 for an individual or for a married couple filing separately (so that’s per person). As you’d expect, married filing jointly is twice that at $12,600. Head of households can claim $9,300, and surviving spouse $12,600. For anyone who takes the standard deduction and doesn’t itemize, that is the amount you’ll claim.

However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)

Forbes published an extensive piece that goes into more detail, including tax tables, which you can read here.

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adoptionIf you’ve adopted a child recently or plan to adopt a child soon, congratulations! We help families adopt as part of our family law practice. Expanding your family through adoption is joyful, and we’re thrilled to be a part of it.

Adoptive parents may have some tax advantages that could help now that it is time to start preparing 2016 taxes. One big advantage is the federal adoption tax credit, which allows many adoptive parents to receive a credit to recover some of the costs of adoption. One note, though: the tax credits are not extended to step-parents adopting the child of their spouse. The tax credits are only available if you are adopting a child under the age of 18 or a child who is physically or mentally unable to care for himself or herself.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

You’d think giving money away would be easy, wouldn’t you? And for the most part, it is. But it’s important to pay attention to some of the details so you don’t end up getting socked with a tax bill or missing out on a tax deduction in return for your generosity.

In our last post, we discussed how to give money to your children, grandchildren or anyone else you’d like without much complication (such as having to file a gift tax return).  Now, let’s turn to gifting that can net you a tax deduction on your income tax return (in addition to just making you feel good).

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

giftsIt’s a generous time of year.

There are donations making their way to non-profits, and checks being written in lieu of gifts to family members. If you prefer to give money rather than gifts to children, grandchildren or others on your list, there are a few things you need to know before you write that check.

We’ll address just giving to your children in this blog post; we’ll address giving to charities in part two later this month.

The main point: your gift can trigger your obligation to file a gift tax return if you aren’t careful. We’ll walk you through who you can give to, how you can give and how much you can give. Here’s the official information from the IRS.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

Everyone who owns a home gets a bill from their local municipality for property taxes. It’s not a surprise that it’s coming. Most of us sigh, write the check (or let your mortgage holder do it) and move on, wondering what that money really does, anyway. (Short answer: it funds governments and schools.)

But every now and then, you get a property tax bill that makes you do a double-take because it is larger than you expected. There are a few reasons this can happen.

  • Your local government entity increased its tax rate.
  • Your property was recently re-assessed, and the value has increased.
  • A new tax referendum passed, increasing your rate.
  • Someone made a mistake.

You don’t have to accept the tax bill you’re sent if you truly believe the tax rate or assessment is wrong. You can protest – and I’ll walk you through how to do that.

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